Nanya and Inotera do not need government money because they have gained strong financial support from parent company Formosa Plastic Group (台塑集團) to pay for a pricey technological migration. After posting narrower third-quarter losses, the two companies said on Wednesday they planned to invest a NT$64 billion next year in upgrading their manufacturing lines to the cost-efficient 50-nanometer and 40-nanometer technologies, up from an investment of about NT$26 billion this year.
POWERCHIP
Powerchip — the nation’s No. 2 DRAM supplier and once seen as a potential capacity supplier to TMC — decided to submit an application for government funding just before the deadline.
The company said it planned to accelerate its diversification into flash memory chipmaking by forming Taiwan Flash Co (TFC, 台灣快閃記憶體公司) and was confident in securing the funds because it had developed flash memory manufacturing technologies with the assistance of Japan’s Renesas Technology Corp several years ago.
DRAM chips are mainly used in personal computers, while flash chips are commonly seen in music players and digital cameras.
The Hsinchu-based company is expected to obtain an initial NT$4.5 billion investment from the government to develop TFC into a flash memory designer. Overall, Powerchip said it hoped to obtain as much as NT$8 billion in public funds.
As for the smaller Winbond Electronics Corp (華邦電子), which produces DRAM and other memory chips used in consumer electronics, the company decided to stick to its previous plan of gradually exiting the PC DRAM market.
“Without fresh capital to upgrade DRAM manufacturing technologies, Winbond and Powerchip were forced to shift to new product lines that are less demanding in technologies,” Liu said.
While some Taiwanese DRAM companies survived the last industrial slump in 2000, there is slim possibility that they can make a comeback this time, because most firms have accumulated massive debts and were unlikely to get any new bank loans or investment to finance technological migration, he said.
“Most Taiwanese DRAM makers may be forced out of the market in the foreseeable future. They have lagged far behind their global rivals in technology and are unable to catch up,” Liu said.
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